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Set up a Branch in China

Updated on Wednesday 17th February 2021

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Large companies worldwide can choose to set up their operations in China through branches. This kind of business form respects both the rules and regulations of the parent company and the legal conditions in China. The business activities remain the same, so does the name of the company and it can act as an extension of the existing firm, regardless of the home country. Even if the registration process of a branch in China is simple, it is best to ask for support and guidelines from our Chinese team of company formation representatives.
 

Conditions to open a branch in China in 2021

 
As it is recommended, foreign entrepreneurs interested in expanding their operations on the Asian market and particularly in China should, first of all, decide on the business type that suits most to their needs and purposes. In this case, establishing a branch in China may represent the proper business idea, keeping in mind the mandatory requirements for such entity and the ones imposed for doing business in China. It is good to know that branches in China are registered through WFOE (Wholly Foreign-Owned Enterprise) In this sense, the parent company which is going to register a branch in China must observe the following conditions with the help of the legal representative of the future business:
 
  • • submit the Articles of Association with complete information about the owners
  • • submit the minimum share capital of RMB 100,000 as established for WFOEs in China;
  • • open a business bank account in the local currency to draft the capital;
  • • register for tax purposes with the National Tax Bureau (taxes and social contributions);
  • • apply for the branch stamps (they can function as signatures).
 
 
Instead of dealing with the language barrier or with any other issues that might occur, you can get in touch with our company incorporation agents in China for help in this matter. We also remind foreigners that our advisors can act on behalf of their businesses in China as legal representatives, nonetheless of the chosen business entity. Registering a company in China is less bureaucratic and investors can start the operations in a fast manner.
 
If you would like to open a branch in China in 2021, you can rely on the support of our representatives. We have a dedicated team who can handle the entire formalities and procedures. Here is an infographic that explains more:
 
Main-steps-of-opening-a-branch-in-China.png
 

Do I need an office for a branch in China?

 
Yes, branches in China which are registered as WFOEs need to have a business address in the first place. In other words, a traditional office for your company in China is necessary. We remind that foreign investors who want to control their businesses from the home country can ask for virtual office services or can set up representative offices in China.
 

Register for tax purposes in China

 
Branches in China need to register for tax purposes before commencing any activities. The company’s documents must be submitted to the National Tax Bureau in the chosen city for business, in charge of tax collection. Also, branches in China need to register with the Quality and Technology Supervision Bureau for the registration code and with the State Administration of Foreign Exchange if the activities involve different currencies and foreign business relations. For VAT registration in China please talk to our consultants.
 
Here is a video about how you can open a branch in China, helped by our consultants: 
 
 

What are the benefits of a branch in China?

 
Branches in China respect about the same conditions as for registering a WFOE (Wholly-Foreign Owned Enterprise), except the fact that the incorporation is much faster. Among the benefits of a branch in China, we remind that such entity has its own licenses and seals and can start the activities as soon as it has been registered with the local authorities in charge. Likewise, branches in China can easily sign deals and contracts with local companies and can participate in varied business activities. If you want to open a company in China, regardless of the chosen business form, you can rely on the support of our advisors.
 

Other branch registration requirements in China in 2021

 
Besides enrolling with the tax authorities, a branch in China needs to register with the Public Security Bureau for obtaining the branch stamp, and the financial stamp. One should note that the company stamps of a branch in China can be used instead of a signature. The registration with the State Administration of Foreign Exchange, the National Bureau of Statistic, and the Quality and Technology Supervision Bureau in China is required. All the formalities that must be respected when dealing with the above-mentioned institutions can be explained by our Chinese company formation agents.
 
Opening a branch in China in 2021 requires complete attention, so you can hire the services of our specialists in company formation in China and benefit from complete support throughout the entire process.
 

Is a business license required for a branch in China?

 
Specific activities might require licenses and permits, so in this case, it is best to verify if the activities you want to implement prior to registration. The license application in China is made with the relevant authorities, mentioning that all the documents must be completed in Chinese. Preparing the documents and formalities for licenses and permits applications in China to enter the attention of our specialists in company formation in China. We advise you to discuss all the aspects of a branch registration in China with our experts instead of dealing on your own with the bureaucracies.
 

FAQ about branches in China

 
1. Is WFOE in China a proper option for a branch?
The Wholly Foreign-Owned Enterprise or WFOE is a great choice for international entrepreneurs who want to establish a branch in China. The formalities can be completely handled by our specialists.
 
2. What is the minimum share capital for a branch in China?
RMB 100,000 is the minimum share capital for a branch in China, established under the rules of a WFOE. It is recommended to open a bank account in the local currency. Our specialists can help you.
 
3. Is tax registration mandatory for branches in China?
Yes, all companies in China must register for taxation and branches make no exception. Tax compliance and management can be discussed with our company formation agents in China who can enroll your branch in China with the National Tax Bureau.
 
4. Can branches have import and export activities in China?
No, branches in China cannot develop import and export activities on their own. Specific business rules in China can be explained by our agents.
 
5. Can I sign contracts while having a branch in China?
Yes, a branch in China works as any kind of company with activities developed locally or abroad. Signing contracts is not restricted, yet, one must observe the general and local regulations applicable.
 
6. Is a branch cost-effective in China?
Yes, compared to a subsidiary, a branch is cost-effective and often the choice of international entrepreneurs interested in business in China. You can talk to our company formation agents in China and find out more about the operational costs in this country.
 
7. What is the difference between a dependent and independent branch office in China.
Dependent branch offices in China can be involved in marketing related operations, maintain contacts and develop new business collaborations. Yet, these cannot participate in business transactions and cannot issue invoices compared to independent branches.
 
8. Are accounting services important to branches in China?
Yes, it is recommended to hire an accounting firm in China and benefit from tailored services to the business needs involving a branch office. Annual financial statements, tax compliance, bookkeeping, and payroll are the main accounting services required for a business in China.
 
9. Do I need a representative for my branch in China?
It is required to have a local representative for your branch in China. One of our company formation agents in China can represent you and explain the business regulations in this matter.
 
10. Is it hard to open a branch in China in 2021?
No, the formalities for opening a branch in China are relatively straightforward if you respect the general and local business rules. You can talk to our agents about branches in China and you can also read interesting facts and figures about the economy and business in China:
 
  • Nearly USD 1.769 billion represented the total FDI stock for China in 2019.
  • In matters of ease of doing business, China ranks 31st out of 190 countries in the world, as stated by the World Bank.
  • China is ranked the second largest FDI recipient in the world, after the USA.
  • Singapore, Hong Kong, South Korea, Germany, Japan, USA, and the Cayman Islands are the main investors in China.
 
If you would like to know more details about how to set up a branch in China, please do not hesitate to contact our team of company formation consultants in China
 
 

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Call us now at +86-755-82148419 to set up an appointment with our company formation specialists in China. Alternatively you can incorporate your company without traveling to China.

As a Tannet Group Limited client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in China. 

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